A scheme which provided disaster payments to bushfire-affected communities is set to be reviewed, amid concerns people are being unfairly excluded because of their postcode.
Emergency Management Minister David Littleproud announced on Wednesday state and territory emergency managers had agreed to a review of the joint Commonwealth, state and territory-funded Disaster Recovery Funding Arrangements.
Mr Littleproud said the review would consider whether the current processes could be streamlined to allow governments to respond faster to community needs.
"Affected communities rightly expect that governments will act quickly following a disaster and provide recovery assistance as soon as possible," Mr Littleproud said.
It came after Emergency Management Australia director-general Robert Cameron criticised the way the program currently ties assistance to people who live in a particular area.
Mr Cameron told the Royal Commission into National Natural Disaster Arrangements government should "do away with the geographic location process" and instead link the funding to a particular disaster.
"Our view at this point ... is [there's] risk of missing someone who might be equally impacted but happens to be outside a geographic boundary, and doesn't happen to meet a threshold in that boundary, a particular percentage, a particular economic function, for example," he said.
"I would rather have that dealt with on an individual needs-based assessment process rather than being perhaps inadvertently misconstrued by a geographic boundary."
Mr Littleproud said even though states and territories were hit with bushfires at the same time, there were different levels of funding available for different jurisdictions.
"The review will look into how each state applies the DRFA and whether the program should be adjusted to deliver more equitable, needs based, assistance for all Australians, regardless of where they live," Mr Littleproud said.
It came after several Victorian local government areas indirectly impacted by the fires became eligible for bushfire recovery grants after months of lobbying.
Indigo, Mansfield and Wangaratta businesses can now apply for government grants, after Victoria agreed to co-fund the extension of the program with the Commonwealth.
"It was always clear to those of us on the ground that the fires' impacts would stretch well beyond the places directly affected by flames," Indi MP Dr Helen Haines said.
"I heard from business owners in Indigo, Mansfield and Wangaratta that the only way the impact could have been worse is if their businesses had actually burned down.
"The fires caused mass evacuations at the peak of the holiday season, parks and forests closed to tourists, Mansfield businesses left with marginal summer visitor revenue, and smoke taint decimated crops in our premium King Valley, Beechworth and Rutherglen wine-growing regions.
"No financial assistance for these businesses has been available."